German airline giant Lufthansa has announced plans to introduce an environmental charge of up to €72 ($77) on European flights. The airline says this new charge is necessary to cover the rising costs associated with the European Union’s (EU) increasing climate regulations.
This extra cost will be applied to all flights sold and operated by the Lufthansa group departing from EU countries, including Britain, Norway, and Switzerland. The charge will come into effect in January of next year and will vary from €1 to €72 depending on the specific route and fare.
Lufthansa explains that they are facing significant additional costs due to the EU’s regulations on sustainable aviation fuel (SAF). These regulations mandate that airlines gradually increase their use of SAF on routes departing EU airports. This requirement will see airlines include two percent of SAF in their fuel mix from 2024, increasing to six percent by 2030 and soaring to 70 percent by 2050.
The aviation sector is known for its challenging efforts to decarbonize, and SAF, a biofuel that produces lower carbon emissions compared to traditional jet fuel, is seen as a crucial solution to achieving emissions targets. However, the production of SAF is currently more expensive than traditional jet fuel.
In March, Airlines for Europe, representing the continent’s largest airline groups, including Lufthansa, expressed concerns about the limited production of SAF in Europe, highlighting that it lags behind projects launched in the United States.
Lufthansa also faces extra costs stemming from changes to the EU’s emissions trading system and other regulatory measures. The group has committed to halving its net carbon emissions by 2030 compared to 2019 and achieving carbon neutrality by 2050.
Following a government bailout during the coronavirus pandemic, Lufthansa experienced strong profits in 2022 and 2023 as travel demand rebounded. However, the airline was significantly affected by a series of strikes at the beginning of this year, resulting in a substantial first-quarter loss.
